The Essentials for Launching Your Clothing Business Startup

You’ve been thinking of building your own fashion empire or humble boutique since childhood. Or maybe you’ve been looking into a new business venture and fashion seems like exciting choice. Whatever camp you’re from, starting a clothing business is serious work. Before taking a full dive in, I’d like to give you some basics about a clothing business startup that derived from my days of running a my own line (which I still do but shifted from menswear to accessories, you can check it out here), like startup cost, target market, a clothing supplier directory of suppliers. Everyone loves using online clothing shops like EziBuy.com so make sure your shop stands out with something helpful like a conversational chatbot.

You can download this guide HERE to have it handy when planning for your business.

Always Room For More

Good news to those who are looking to start a clothing business because according to Entrepreneur, there’s room for the right kind of apparel store. Their website states that while you may see mostly large malls, with big chain stores, selling at an ever more cheaper price that you can ever do, most retail stores, are small in size and in sales volume, run by an owner or a team of family members.

Why this is good news? Because this means your dream of making it in the fashion business world just got closer. While hard work, planning, strategizing and being able to get it delivered to the clients will still determine your overall success, don’t overrule your potential in the field because of the fact that you are a no name, a no body in this industry. Every body got there start somewhere, and I’m sure when they did, they probably said the same “The market is overly saturated, should I really do this??” If that were the case, there would never be any new businesses popping up.

The Important Questions for a Clothing Business Startup

Now that we’ve cleared your doubts, what are the vital things you need to ask yourself to begin planning for your clothing business startup?

One important thing to remember that if you are planning to begin your clothing business startup venture, it’s hard to properly manage when you are juggling a 9 to 5er at the same. If you are unable to severe with your corporate income, consider:

• reducing your hours to part time if possible;
• applying for a government grant;
• take a paid vacation to set up the initial requirements of a clothing business startup; or
• take on a less demanding job with less hours so you are able to dedicate some time during the day to your startup.

Experience Factor

• Do you have any experience in the fashion field?
• Somewhat of an understanding as to how merchandising works??
• Or what the operational requirements are???

If you do is a definite plus. If not, reading a few articles on a clothing business startup would surely enrich your mind and give a few good takeaways.

What’s Your Niche?

So yes, it might overcrowded but nowadays everything is. As I’ve said before, it doesn’t mean you can’t get a piece a of the pie.

• Have you decided on what your target market will look like
• What are they into?
• How old are they?
• Will you be specialising in a particular market segment? For example, denim and jeans clothing?

Are You a Risk Taker?

To take a risk, you have to truly believe in the endeavour you are taking on, and take a risk or two.

• So essentially, do you think you are or can be passionate about your clothing business startup?
• Will you risk your savings, your comforts for it?

Can You Offer a Competitive Edge?

Your competitors are everywhere. So how will you face them and gain a loyal clientele?

• What can you offer that they can’t?
• Are you listening to what your niche is looking for? There are many ways of doing that and not all cost money.
• How can you get to your clients first?

The ABC’s of a Clothing Business Startup

Ok we’ve gotten some of the vital questions out of the way, what about the fundamentals of your clothing business startup?

Startup Costs

Experts say it could cost somewhere around $250,000. I’m sure it’s not what you expected to dish out for your clothing business startup, nor do you think you can get that type of cash.

Unless you have the right financing, experts say don’t even think about it. However there is an advantage that businesses have nowadays that didn’t exist before. If you didn’t have a street front in previous times, how were you expected to put your product in front of your customers? Luckily, you can totally opt out of the brick and mortar style shop and just make your clothing business startup on an online platform. This will save you a tremendous amount of money in rent, overhead, utilities, etc.

Financing

While fashion entrepreneurs believe $50,000 should be the minimum, I think if you open up a Shopify, an Etsy, or an eBay store, you have more room to be creative with the dollar amount of your startup cost, essentially requiring less of it. While having more money makes many things easier, don’t get discouraged because you don’t have a quarter million dollars sitting in your bank account waiting to be invested.

Start by looking into the various online shop platforms to see how much they charge for their services, listing items, and integration within your website. If you need some help with designing your website, check out small business website design services.

If you are adamant on going big and obtaining a business loan, you can alway craft a business plan and present it to a bank. Entrepreneur.com has an amazing resource of business plan writing tools to get you started.

Rule of Thumb

A general rule of thumb that applies to physical stores but with some creative math you can bell curve the rates to reflect what it would cost to “rent” a virtual spot for your clothing business startup on an online platform. According to Dan Paul, an industry consultant with retail consulting firm, RMSA:

“Rent should be kept between 5 and 6 percent of your total sales, so at the top end, you can figure that you’ll need $18,000 a year for rent. That means in order to keep rent at 6 percent, your store will have to generate $300,000 in annual sales.”

Target Market

We’ve addressed your niche in the above questions. Whatever you decide to specialise in, make sure you are aware of what makes you stand out in a crowded market with big dogs like Macy’s, JC Penney, etc.

Will you be selling to:

• Women, men, or children?
• What are their ages?
• Where do they live?
• What do they do in life?
• What do they like?
• The list can go on and on until you’ve dissected your perfect customer.

Your advantage is that you’re small, and because of that, you possess a charm that large merchandisers do not. This gives you an advantage playing field. You can focus on building a community, deeper connections with your clients thanks to your size as you are able to cater your service to each customer based on their preferences and needs.

This Market Segmentation Study Guide provides a detailed path as to how you can select your target market.

Wholesale Buyers

If your clothing business startup is more about your designs that you will be selling wholesale to buyers, you’ll need to identify which boutiques resonate most with your designs. A similar exercise as the one above is still essential, whether you are selling only wholesale, only retail, or both.

However, if you are seeking wholesale buyers, you might want to create what’s called a press kit to present to prospective buyers. Here are a couple of examples from Haiku Deck which is a very visual and easy one to follow, and another you can download from Bloop.

As a designer, you’ll need to have a lookbook (some tips here from Blog & Remember Business) and a line sheet from Indie Retail Academy to showcase your collection.

Suppliers

Without suppliers, you don’t have a product. You don’t have a product, then you don’t have a business. Plain and simple, you need a reliable roaster of suppliers of whatever category you decide to choose.

When selecting a supplier, you need to go by reputation, technical expertise, variety, prices, and proximity. Whether you are buying from wholesaler ready made garments for your boutique or designing your own, you need the right types of suppliers.

If you are buying wholesale, you need to find a wholesaler in the category you want to sell. If you are designing, things get a little more complex. You need a supplier for:

• sample maker (unless you are able to do that yourself);
• pattern maker (unless you are able to do that yourself);
• fabric;
• trims and findings;
• cut and sew; and
• packaging.

Offshore or Domestic

While you can choose to go offshore, note that you’ll often be required to commit to quantities that are larger than what you require. If this is not your mandate, stick to domestic sourcing, as they generally will accommodate smaller orders, and cater to your requirements. Not to mention the fact that shipping is faster and in most cases, cheaper for you with a shorter lead time. Pricing though is more expensive when sourcing domestically. You will have more control over quality, timelines are shorter, and communication is far easier.

This white paper from Project Smart provides an in-depth look at supplier selection. While it is not unique to the apparel industry or a clothing business startup, it surely does provide some good insight to watch out for when choosing a partnership.

Remember, a supplier is a vital aspect of your clothing business startup, as without a reliable one, you don’t have a product to market.

Marketing

I don’t need to say it, this one is important. Very important. But in order for you to feel the importance, it has to be done right, done strategically, and something you have to be willing to invest in. At least if not at the beginning, then in the long run. It’s often one of the first things that gets cut off. Think about it though, if no one hears of you, how will you get customers? Social media is a great way to implement an Instagram, Facebook, or TikTok marketing strategy.

For a clothing business startup, you need to be able to convince your potential customers that you have what they need, more so than the other big guys. To do that, you have to seem more desirable, attractive, responsive to their needs, and yes you guessed it, IN THEIR FACE so you can TELL them that. The key is HOW to get in front of their faces? Yes a huge question with a HUGE answer.

It’s not one that will discuss in finite detail here because it won’t only comprise of a blog post, rather an ebook (or maybe a volume of ebooks). For your clothing business startup, we can go over the basics and I can let you do the rest on your own.

Directories

I put this with marketing as it is a form of promoting yourself.

Say the business model you decide to adopt is wholesale jeans to boutiques, as a wholesaler or designer. For a B2B, conventional marketing methods aren’t always applicable, so you have to rely on directories to be found by retailers. A jeans and denims clothing directory is a critical tool for any serious wholesaler. The directory is of pivotal importance to both the seller and the bulk buyer.

Detailed Information

A good directory gives the seller an opportunity to enable customers to identify the business and to establish its location. There is no point of running a clothing business startup that very few of the target clients know whether it exists or where it is located. Otherwise how will new customers locate the business? Details of the location in the directory enable the customer to determine the distance to be covered to make the purchase. This will definitely affect the transportation costs and subsequently influence the decision on where to make the large scale purchase. Thus, a good jeans and denims clothing directory has to explicitly and meaningfully state the exact location details of the business.

Availability

It’s also the first point of contact between the new prospective buyer and your clothing business startup. So it is here that the serious wholesale buyer will initially determine what varieties of the product are available from the wholesaler. Going back to the jeans example, there are several categories of denims clothing! At this point the client takes time to determine whether you have the desired types of the attire. Is the required stock of the products available in this store? The availability of the products is decisive detail that cannot be ignored in the directory.

Prices

Granted, now the location is known and the products are available, but that is not all. The wholesale prices are the other consideration that determines whether the shop will secure the business or not. It’s normal that customers almost always look for the best value for their money. They look for the best bargain. Decisions on which shop to buy from are partly going to be influenced by the price factor.

On the flip side however, this might constitute a weapon to be used by competition as they wage a pricing war by trying to offer cheaper prices for the same commodities. The directory is itself a promotional avenue for the wholesaler. It presents an opportunity for the business to communicate to customers. Additionally it gives a platform on which the wholesaler showcases other promotional offers and warranties to the clients. Though getting space on something like a jeans and denims clothing directory might cost some money, its advantages to both the wholesaler and the bulk purchasers outweigh the costs. You can check out B2Bwholesaler.com. It’s a wholesale directory that offers plenty of information and wholesale products.

Everybody’s Different

Businesses are like people, each one is different. What that means is, each one will need different things to succeed. It`s your job to try to figure out from the tools available out there, which one will work for you. Once it worked, apply it again, but it doesn’t mean your winning recipe will always come out on top. As technology evolves and people’s taste change, so will your strategy.

Advertising (or marketing in general) should be sought as a means to building and grow your sales.

The 70/20/10 Rule

To start, go with the 70/20/10 rule (I learned that from an online video in your marketing mix course). What that means is invest 70% of your marketing budget into tried and true ways that have worked in the past. The 20% will go to ways that have been tested but not yet mainstream. Invest 10% in things that have never been done before, that are highly creative, edgy, and possibly controversial.

Whatever media you decide to go with, make sure it suits, and more importantly, reaches your audience, is applicable, measurable, and flexible. It should be well planned, provide an enticing and distinctive perspective to your customer that will draw them to you, as well as resonate with them. Don’t forget about applying your branding so that you can be recognisable wherever you go, especially as you begin to build a name for yourself. Make sure you keep your branding and application of it consistent, otherwise you will confuse your customers.

Operations

You will likely be living and breathing your clothing business startup. If you have a family, warn them that this will surely take you away. It might not be pretty. I know I did it, my husband did it to when he first opened his coffee shop. I hardly saw him. But it’s the nature of the beast.

Your Shop’s Policies

It’s a good idea to write up your store’s operating policies. This is essential because it will avoid you making rash decision that may lead you to losing customer, gaining an unfavourable reputation (especially online, this is detrimental).

Any policies you opt for regarding the following list should be listed in your Shop Policies section for your customers to read:

• Hours of operation;
• Merchandising;
• Methods of payments accepted;
• Shipping;
• Taxes;
• Damages;
• Gift cards; and
• Exchanges and returns.

Selecting a Location

Part of the four Ps in Marketing is place, or location. While it is one of the things that will define your overall success, knowing what to look for is key to ceasing that success.

Online Platform

With the rise of online shops, and as a clothing business startup, you want to leverage existing shoppers from a high traffic convertible platform. Examples of such sales platforms are Etsy, Shopify, ebay, Amazon, etc. In choosing one of these communities, you tap into their customer base that will be ore likely to visit your sop than if you were a standalone website.  in which to open your store, you’ll want to consider a number of location “whether” factors (this will serve as a review of our marketing chapter), including whether the community has a large enough population, whether its economy is stable enough for you to make money and whether the area’s demographic characteristics are compatible with your target market.

This article from Ecommerce Platforms provides further insight into what I mentioned above.

Street Front

If you are going the physical store route, landlords will require a square foot rental from you paid on a monthly basis. Rent can be anywhere from $8 per square foot in certain parts of the country, and close to $40 per square foot in high-traffic areas. Some land ask for a percentage of the tenant’s monthly gross sales, above a certain specified amount, on top of the minimum monthly rental.

There are additional charges should you decide to grab a mall location, such an add-on charge. It’s based on your square-footage charge or is taken in a form of a small percentage of your sales. It’s intent is to cover promotional costs and common areas upkeep such as parking, sitting areas, washrooms, etc. This list from MIT is pretty complete when reviewing a location to rent.

Even with a physical retail location, don’t forget that you still need to have an online hub for your products to reach your customers. You may decide to sell directly off of your website, or leverage an existing platform such as amazon to post your products on.

Manpower

Your clothing business startup needs will vary based on your whether you have a physical and online location, or operate only online.

However, for both options, you certainly might will require staff. Whether it consists in a form of an outsource or full or part time employees, the decision is driven by your type of business and budget.

Street Front

For a 1,000-square-foot store, you’ll need to hire one full time and one part time employee. You might want to jot down the skill set you are looking for to draft your job posting so you can get candidates that match the profile you’re seeking.

For the most part, personality and reliability are key, as all of the other operational requirements can be taught. Experience is also essential but if your staff is not approachable and welcoming, that will eventually hurt your bottom line.

Online Platform

For your online operations, if you aren’t tech savvy, lack time, or simply couldn’t be bothered, you’ll need a web developer that can do all the web work for you if you are selling directly off of your website. That isn’t necessarily a full time or part time position. It can be done on as needed basis. Source someone that’s reliable and have a signed agreement with them as to service level agreement, work order types to be expected, and revisions.

If you choose to go with an existing platform, that may make this additional cost disappear or at the very least, reduce it.

Pricing

In order to be profitable, you need to properly price your products. If you’re a designer, you might be so emotionally tied to your designs that you end not pricing accordingly. Or at the other extreme, to be competitive, you might think that it would be best to underprice to drive traffic but then struggle to cover your cost.

To help you, Entrepreneur.com put out another amazing article with detailed calculations that help you come up with a winning equation to properly price your products.

Finances

We arrive at the last piece of puzzle. It’s also very important to keep you afloat in your clothing business startup.

Budgeting & Business Forecasting

Personally for me, this was always one of the toughest things I had to deal with. I am simply not good with budgeting and often leave my hubby to do these things for me. But not all of us have that support system. Luckily, websites like Infoentrepreneur have detailed posts about how to set up a budget and forecasting for your clothing business startup.

Accounting

As a business, accounting has to become a second nature. While you can always hire a firm or a bookkeeper, it’s not a bad idea to get familiarised with some of the concepts to better serve your clothing business startup. Shopify has a well-rounded blog post about this topic.

That brings me to my conclusion of the essentials you need to think about when launching your clothing business startup. Yes it’s a lot but this can be a good start to put your plan into action, or even start a plan. If you want more resources, check out this blog post from Entrepreneur.com that lists a bunch of them for your to read.

You can download this guide HERE and benefit from it offline. Let me know if there’s anything I missed. I’d love to hear from you.

Source: How to Start a Clothing Store from Entrepreneur.com.